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Thursday, April 30, 2015

filed Complaint (ULP) No. 534 of 2004, before the Industrial Court challenging the sale and transfer of employment of the employees but no interim relief was granted by the Industrial Court, hence, all the workmen came on the rolls of appellant-Company and started drawing wages from it. The appellant claimed that it has framed Voluntary Retirement Scheme (for short “VRS”) on 12.4.2005 for the workmen, offering amounts, tax free, to each workman with all other dues such as gratuity, ex-gratia, provident fund, leave encashment etc. which was operative from 12.4.2005 to 30.4.2005. On 15.04.2005, 45 out of the total 143 workmen applied for the said VRS and collected the VRS payments and the remaining workmen collected the VRS payments on 20.04.2005 and 21.04.2005. After the payment of the VRS benefits, the workmen were relieved from their services by the appellant- Company.



                         IN THE SUPREME COURT OF INDIA
                          CIVIL APPELLATE JURISDICTION

                         CIVIL APPEAL NO.246 OF 2009

M/S ARIANE ORGACHEM PVT. LTD.          …APPELLANT
                                     Vs.
WYETH EMPLOYEES UNION & ORS.         …RESPONDENTS
                                    WITH
                            C.A. NO. 247 OF 2009

                               J U D G M E N T

V. GOPALA GOWDA, J.

      I.A.No.2 of 2015 in C.A.No.247 of 2009 for substitution  of  the  name
of the appellant-Company is ordered.

  These appeals are directed against the common impugned judgment and  order
dated 16.8.2007 passed by the High Court of Judicature  at  Bombay  in  Writ
Petition No.444 of 2007, whereby the High Court quashed  the  order  of  the
Deputy Commissioner of Labour, Mumbai, dated 14.8.2006 and directed  him  to
refer the industrial dispute of the concerned workmen as  per  their  demand
dated 14.11.2005, for adjudication of the matter to the Industrial  Tribunal
under Section 10(1)(d) of the Industrial Disputes Act, 1947 (for short  “the
Act”).

  Since both the appeals are filed against the common impugned judgment  and
order of the High Court, for the sake of convenience, we would refer to  the
brief facts of C.A.No.246 of 2009 which are stated hereunder:

    The appellant-Company, M/s. Ariane Orgachem Pvt.  Ltd.  was  established
to manufacture and market drugs which are manufactured by it. The appellant-
Company, have taken over the alleged loss incurring  pharmaceutical  factory
of M/s. Wyeth Ltd. respondent No.3 herein (appellant-Company in  C.A.247  of
2009), situated  at  146,  LBS  Marg,  Ghatkopar,  Mumbai,  along  with  its
permanent employees, pursuant to an agreement dated 25.6.2004 and  the  sale
deed dated 30.6.2004.  The  letters  were  issued  to  the  workmen  by  the
appellant in this regard, to the effect that they would  be  employed  under
its management without any interruption in their services.

 On 30.08.2004, the appellant-Company acquired the  erstwhile  manufacturing
facility  of  M/s.  Wyeth  Ltd.-respondent  No.3  and  on   31.8.2004,   the
respondent No.3 issued letters to  its  workmen  working  in  its  erstwhile
factory, informing them about the sale and transfer  of  the  ownership  and
management of the said factory to the appellant-Company in  accordance  with
the provision of Section 25-FF of the Act. They were further  informed  that
their services will not be  interrupted  due  to  such  transfer  and  their
services will be treated as continuous and uninterrupted for the purpose  of
retiral/terminal benefits. Thereafter,  all  the  workmen  whose  employment
came to be transferred from M/s Wyeth Ltd. to the appellant-Company  started
drawing their wages/salary and all other  benefits  like  advance,  LTA  and
leave, etc. from the appellant.

 On 2.9.2004, the respondent no.1-Wyeth  Employees  Union  (for  short  “the
Union”),  which  is  the  recognized  Union  under  the  Provisions  of  the
Maharashtra Recognition of Trade Unions  and  Prevention  of  Unfair  Labour
Practices Act, 1971 (for short “the  MRTU  &  PULP  Act”),  filed  Complaint
(ULP) No. 534 of 2004, before the Industrial Court challenging the sale  and
transfer of employment of the employees but no interim  relief  was  granted
by the Industrial Court, hence,  all  the  workmen  came  on  the  rolls  of
appellant-Company and started drawing wages from it.

 The appellant claimed that it has framed Voluntary Retirement  Scheme  (for
short “VRS”) on 12.4.2005 for the workmen, offering amounts,  tax  free,  to
each workman with all other dues  such  as  gratuity,  ex-gratia,  provident
fund,  leave  encashment  etc.  which  was  operative  from   12.4.2005   to
30.4.2005. On 15.04.2005, 45 out of the total 143 workmen  applied  for  the
said VRS and collected the VRS payments and the remaining workmen  collected
the VRS payments on 20.04.2005 and 21.04.2005. After the payment of the  VRS
benefits, the workmen were relieved from their services  by  the  appellant-
Company.

  It is further stated by  the  appellant-Company  that  on  26.4.2005,  the
first  respondent-Union  through  its  General  Secretary,   unconditionally
withdrew Complaint (ULP) Nos. 534 of 2004, 714 of  2004  and  771  of  2004,
confirming to the court that all the workmen had availed  the  VRS  and  the
Union did not want to pursue the cases.

 After several months of accepting the VRS, the respondent-Union raised  the
demand seeking their reinstatement in the Company  of  respondent  no.3.  In
response to the said demand, the  appellant-Company  replied  that  all  the
workmen had taken the VRS benefits and they were not the workmen  of  either
the appellant-Company or the third respondent’s Company anymore,  therefore,
no industrial dispute  could  be  raised  by  or  on  their  behalf  by  the
respondent-Union. On 12.12.2005, the respondent-Union,  wrote  a  letter  to
the Assistant Commissioner of Labour, seeking his  intervention  in  respect
of their demand with the Company. On 01.08.2006,  the  Conciliation  Officer
sent the failure report to the Assistant Commissioner of Labour,  subsequent
to which on 14.08.2006, the office of the Deputy Labour  Commissioner  which
took cognizance of   the  failure  report  declined  to  make  an  order  of
reference to the Industrial Tribunal  stating  thereby  that  there  was  no
industrial dispute in existence between the parties.

 Thereafter, the newly elected  leadership  of  the  first  respondent-Union
under the representation of its  new  General  Secretary  aggrieved  by  the
order of refusal to make an order of reference to  the  Industrial  Tribunal
by the Deputy Commissioner of Labour filed Writ Petition  No.  444  of  2007
before the High Court urging  various  legal  grounds  and  questioning  the
correctness of the same.

The High Court in exercise of its power quashed the  order  dated  14.8.2006
passed by Deputy Commissioner of Labour, Mumbai, who has refused to make  an
order of reference to the Industrial Tribunal for its  adjudication  of  the
industrial dispute between the parties. The High Court  has  held  that  the
acceptance of the benefits by the concerned workmen from the  appellant  may
not establish the fact that no force or  compulsion  was  exercised  by  the
appellant and this is the most contentious and  disputed  question  of  fact
which could not have been decided by the State  Government  in  exercise  of
its administrative power. The  High  Court  has  held  that  the  subjective
satisfaction of the subject matter of  an  industrial  dispute  between  the
parties by the State Government is therefore, vitiated in law and making  an
order of reference  in  respect  of  the  concerned  workmen  is  absolutely
essential in this regard.  Thus,  the  High  Court  by  issuing  a  writ  of
mandamus, directed the Deputy  Labour  Commissioner  to  make  an  order  of
reference  to  the  Industrial  Tribunal  with  regard  to  the  demand   of
industrial dispute raised by the Union dated 14.11.2005  on  behalf  of  the
concerned workmen, for its adjudication under Section 10(1)(d) of  the  Act.
Aggrieved by the impugned judgment of the High  Court,  these  appeals  have
been filed by the appellant-Companies, praying this Court to set  aside  the
same contending that  the  High  Court  has  exceeded  its  jurisdiction  in
passing the impugned judgment and order.

It is urged by Mr. C.U. Singh, the learned senior counsel on behalf  of  the
appellant-Company that the VRS  benefits  were  accepted  by  the  concerned
workmen between 15.4.2005 to 25.4.2005 and the cheques which were issued  to
them towards their voluntary retirement  benefits  were  encashed  by  them.
Therefore, raising the industrial dispute by  the  concerned  workmen  after
lapse of 7 months, from the date of  acceptance  of  the  VRS  benefits,  is
wholly untenable in law. It has been further  contended  by  him  that  many
concerned workmen have cleared their bank loans such as housing  loans,  Co-
operative Society/Co-operative bank  loans  and  the  appellant-Company  has
received  intimations  from  the  Banks/Societies  to  stop  deducting   and
remitting loan instalments from their salaries.

It has been further contended by him that the former Joint Secretary of  the
respondent no.1-Union had withdrawn the Complaint (ULP)  Nos.  534  of  2004
and 714 of 2004 and Complaint (ULP) No.771 of 2004, after stepping into  the
witness box and confirming to the Court that all  the  workmen  had  availed
the VRS benefits and the first respondent-Union did not wish to  pursue  the
cases. Therefore, the demand raised by the first respondent-Union on  behalf
of the concerned workmen through its General Secretary contending that  they
have not availed the VRS benefits under the scheme is only  an  afterthought
and the same does not amount to an industrial dispute and  therefore,  there
is no dispute for the Industrial Tribunal to adjudicate. The  Deputy  Labour
Commissioner has rightly arrived at the  conclusion  on  the  basis  of  the
facts on hand and declined to make an order of reference to  the  Industrial
Tribunal for adjudication of the same. This important  aspect  of  the  case
has not been taken into consideration by the High Court while  quashing  the
order of refusal to make an order of reference to  the  Industrial  Tribunal
and it has erroneously issued a writ of mandamus to the Deputy  Commissioner
of Labour against the appellant  by  directing  him  to  make  an  order  of
reference  of  the  industrial  dispute  on  the  demands  raised  by  first
respondent-Union on behalf of the concerned workmen.

It is further contended by the learned  senior  counsel  on  behalf  of  the
appellant that the  first  respondent-Union  has  not  made  any  allegation
against the appellant, regarding the alleged coercion and  fraud  played  by
the appellant in obtaining the voluntary retirement letters, either  in  the
demands submitted to the  appellant  or  before  the  Conciliation  Officer.
Therefore, raising the said contention by  the  first  respondent-Union  for
the first time before this Court, without it being first raised  before  the
Industrial Tribunal and the Conciliation Officer is not permissible  in  law
as held by this Court in the case of Bishundeo Narain & Anr. v. Seogeni  Rai
& Anr.[1]  Further, it is contended that in view of Section 59 of  the  MRTU
and PULP Act, there is an express bar on the first respondent  to  raise  an
industrial dispute against the appellant-Company. This legal aspect  of  the
case has been considered by this Court in the cases  of  M/s.  Mahabir  Jute
Mills Ltd., Gorakhpur v. Shri Shibban Lal Saxena & Ors.[2] and Govind  Sugar
Mills Ltd. & Anr.  v.  Hind  Mazdoor  Sabha  &  Ors.[3]  Further,  the  said
allegations made by the first respondent-Union with regard  to  the  alleged
coercion upon the concerned  workmen  by  the  appellant  is  not  factually
correct and the same  cannot  be  considered  by  this  Court  as  it  is  a
frivolous and incorrect statement of  fact  made  on  behalf  of  the  first
respondent-Union with a view to raise frivolous industrial  dispute  against
the appellant-Company and the respondent No.3.

 The learned senior counsel has further placed reliance upon  the  following
decisions of this Court in  Bank  of  India  &  Ors.  v.  O.P.  Swarnakar  &
Ors.[4], A.K. Bindal & Anr. v. Union of India  &  Ors.[5],  Punjab  National
Bank v. Virender Kumar Goel & Ors.[6], Punjab &  Sind  Bank  &  Anr.  v.  S.
Ranveer Singh Bawa & Anr.[7] and Bank of India & Ors. v. K.V. Vivek  Ayer  &
Anr.[8] in support of the proposition of law that once the VRS  is  obtained
and accepted  by  the  concerned  workmen  along  with  all  other  monetary
benefits, the same would amount to availing benefits of the  scheme  and  no
claim can be made by the concerned workmen  against  the  employer  for  its
reconsideration and no order of reference can be  made  for  the  industrial
dispute by the appropriate  government  as  the  same  does  not  exist  for
adjudication. Therefore, the principle of  estoppel  is  applicable  on  the
concerned workmen to raise an  industrial  dispute  against  the  appellant-
Company and the respondent No.3 herein on the subject  matter  of  voluntary
retirement, for the reason  that  once  they  have  accepted  the  voluntary
retirement from their services  and  withdrawn  all  the  monetary  benefits
which were paid to them by the appellant, they cannot raise  the  industrial
dispute in this regard as the  same  is  not  permissible  in  law.  He  has
further placed reliance upon the judgments of this Court  in  the  cases  of
Gyanendra Sahay v. Tata  Iron  &  Steel  Co.  Ltd.[9]  and  Vice-Chairman  &
Managing Director, A.P.S.I.D.C. Ltd. & Anr. v.  R.  Varaprasad  &  Ors.[10],
wherein the aforesaid principles of law have been reiterated by this Court.

 Further, it has been contended by him that the  scope  of  judicial  review
power of the High Court to examine the order passed by the State  Government
in exercise of its  administrative  power  in  the  writ  petition  is  very
limited as has been held by this Court in the  cases  of  Secretary,  Indian
Tea Association v. Ajit Kumar Barat & Ors.[11] and ANZ Grindlays  Bank  Ltd.
v. Union of India & Ors.[12]  Therefore,  the  learned  senior  counsel  has
submitted that the impugned judgment and order is required to be  interfered
with by this Court in exercise  of  its  jurisdiction  as  the  exercise  of
judicial review power by the High Court  is  bad  in  law  which  cannot  be
allowed to sustain.
 On the other hand, Mr.  Sanjay  Singhvi,  the  learned  senior  counsel  on
behalf of the first respondent-Union has  sought  to  justify  the  impugned
judgment and order passed by the  High  Court  contending  that  the  Deputy
Labour Commissioner acting as  a  delegatee  of  the  State  Government  has
erroneously refused  to  make  an  order  of  reference  to  the  Industrial
Tribunal on the demands raised by the workmen and he has committed  a  grave
error in law and  therefore,  the  High  Court  has  rightly  exercised  its
extraordinary and supervisory jurisdiction and quashed the same  by  issuing
a writ of mandamus. The learned senior counsel has  further  contended  that
the Deputy Commissioner of Labour in fact and in law is not a  delegatee  of
the State Government and therefore, he could not have legally made an  order
of refusal to make an order of reference of the industrial  dispute  to  the
Industrial Tribunal for its adjudication. It has been further  contended  by
him that the signatures of the concerned  workmen  were  obtained  on  blank
papers and there was no VRS scheme introduced by the appellant.  Hence,  the
question of seeking  voluntary  retirement  from  their  services  does  not
arise. Further, the respondent No.3-M/s. Wyeth Ltd., the  Company  in  which
the concerned  workmen  were  working  initially  had  intimated  the  stock
exchange  about  the  stoppage  of  its  manufacturing  operations  at   the
Company’s plant at LBS Marg, Ghatkopar, Mumbai. Therefore, it is clear  that
the said Company wanted to  discontinue  and  close  down  the  factory  and
terminate the  services  of  the  concerned  workmen  from  their  services.
However, being a profitable Company,  with  profit  making  operations,  the
Company has resorted to achieve its end through a  subterfuge  by  obtaining
the signatures of the concerned workmen on the blank papers by  using  undue
influence, coercion etc. in order to circumvent the  provisions  of  Section
25(O) of the  Act.  Therefore,  the  alleged  voluntary  retirement  of  the
concerned workmen, is a disputed  question  of  fact,  as  the  workmen  are
contending that they have not  voluntarily  submitted  any  application  for
voluntary retirement from their  services  to  the  appellant-Company  which
fact is seriously disputed by the  appellant  and  therefore,  the  same  is
required to be adjudicated by the  competent  Industrial  Tribunal  and  not
referring the said dispute between the parties by the  State  Government  to
it is an arbitrary and unjustified exercise of power  which  is  not  within
the jurisdiction of the State Government, in exercise of its  administrative
power under the provisions of Section 10(1)(d) read with the Third  Schedule
of the Act. For the above reason itself, the  High  Court  is  justified  in
quashing the impugned order in the writ petition  by  passing  the  impugned
judgment and order which does not warrant  interference  by  this  Court  in
exercise of its appellate jurisdiction in these appeals.

It has been further contended by the learned senior counsel  for  the  first
respondent-Union that the appellant-Company is owned and controlled  by  the
Runwal group, which is a builder/developer and it has entered  into  a  sham
arrangement with M/s Wyeth Ltd. on 30.8.2004 purporting it to be an  alleged
transfer of the ownership of its undertaking in  favour  of  the  appellant.
However, it is a transfer of the assets of  the  Company  only  without  the
transfer  of  the  business  of  the  appellant  in  the  connected   appeal
(respondent no.3 herein) and the  same  cannot  be  said  to  be  a  genuine
transfer of undertaking of M/s Wyeth Ltd. in  accordance  with  law  and  in
terms of Section 25 FF of the Act. The said action of appellant-Company  and
the respondent no.3 herein is in violation  of  the  provisions  of  Section
25(O) of the Act.

 Thus, it is urged by the  learned  senior  counsel  that  in  view  of  the
aforesaid reasons the question of the alleged transfer of the  workmen  from
M/s. Wyeth Ltd. to the appellant-Company is only a ruse and  was  done  only
with a view to acquire the property for real estate development.  Therefore,
the factual contentious issue of the alleged  voluntary  retirement  of  the
concerned workmen and the acceptance of the monetary benefits by  them  need
to be adjudicated by the competent Industrial Tribunal  under  an  order  of
reference of the industrial dispute which has to be referred  by  the  State
Government. This aspect of the matter has not been considered by  the  State
Government at the time  of  passing  an  order  declining  to  exercise  its
administrative power to  make  an  order  of  reference  to  the  Industrial
Tribunal for its adjudication of the  existing  industrial  dispute  between
the workmen and the employer effectively.

Further, it has been contended  by  the  learned  senior  counsel  that  the
alleged VRS benefits said to have been given to the concerned workmen  is  a
false plea pleaded by the appellant-Company before the Conciliation  Officer
to justify their illegal action  and  the  same  requires  scrutiny  by  the
Industrial Tribunal on the basis of the evidence that has to be  adduced  by
the parties.  The  findings  of  fact  need  to  be  recorded  by  it  after
adjudication of the dispute that is required to be referred  to  it  by  the
State  Government  in  exercise  of  its  administrative  power  under   the
provisions of the Act.

It has been further contended by the learned senior  counsel  on  behalf  of
the first respondent that after  the  resignation  of  the  earlier  General
Secretary of the first respondent-Union was accepted,  a  new  Committee  of
the respondent-Union was elected. Thereafter, it  decided  to  take  up  the
issue of illegal termination of services of the  concerned  workmen  by  the
appellant-Company. Further, the Deputy Labour Commissioner,  who  has  acted
as the delegatee of the State Government, has not looked into the fact  that
it took about 2 to 3 months for the new Committee of the  first  respondent-
Union to take over the affairs of the Union  which  was  running  under  the
guidance of its former General Secretary and to act in  the  matter  of  the
forced termination  of  the  concerned  workmen  from  their  services.  The
petition submitted to  the  Conciliation  Officer  by  the  respondent-Union
specifically pleads that “neither any voluntary scheme was ever  framed  nor
published by the appellant” and the concerned workmen have not retired  from
their services voluntarily. This aspect of the matter  has  not  been  taken
into consideration by the Conciliation Officer as well  as  the  appropriate
State Government at the time of passing the order refusing to make an  order
of reference to the Industrial Tribunal for adjudication of  the  industrial
dispute. The State Government has also not noticed the  relevant  fact  that
the former General Secretary, without the proper authorisation  from  either
the first respondent-Union or the concerned workmen,  withdrew  the  earlier
complaints referred to supra, filed on  behalf  of  the  concerned  workmen.
Further, the State Government has failed  to  consider  the  fact  that  the
appellant-Company  has  stated  about  the  VRS  being  published  for   the
concerned workmen for the first time, only before  it  and  not  before  the
Conciliation Officer in the earlier proceedings. Further,  due  to  coercion
and fear, the workmen were compelled to sign on the  blank  papers  and  the
purported voluntary retirement letters alleged to  have  been  submitted  to
the appellant were not considered by it. The first  respondent-Union  called
upon the appellant-Company to produce the Resolution  passed  by  its  Board
before the Conciliation Officer, with regard to  the  alleged  VRS  and  the
order of approval said to have been granted by the Income Tax Authority  for
such scheme. The  same  were  not  produced  by  the  appellant  before  the
Conciliation officer. The State Government at the time of passing its  order
ought to have considered this important factual aspect of the matter  before
refusing to pass an order to make a reference  to  the  Industrial  Tribunal
regarding the dispute between the  parties  in  relation  to  their  illegal
termination. For this reason also, the High Court is justified  in  quashing
the order of refusal to make an order of  reference  and  therefore,  it  is
rightly justified in issuing a writ of mandamus to the State  Government  to
make an order of reference to the  jurisdictional  Industrial  Tribunal  for
adjudication of the industrial dispute between the parties.

The learned senior counsel has further urged that the failure report of  the
dispute was addressed to the Additional  Commissioner  by  the  Conciliation
Officer on 1.8.2006, but the Deputy Commissioner of Labour  called  for  the
file from the Conciliation Officer and declined to exercise his power  under
Section 10(1)(d) read with the Third Schedule of the Act, without  adverting
to a single contention urged on  behalf  of  the  workmen  in  the  petition
submitted before the Conciliation Officer  by  the  first  respondent-Union.
The non-consideration of the claim made by the  respondent-Union  on  behalf
of the concerned workmen by the Deputy Commissioner of Labour  at  the  time
of refusing to pass an order of reference, not only  vitiates  the  impugned
order in the writ petition on account of non  application  of  mind  by  the
alleged delegatee of the State Government but also vitiated in law  for  the
reason that the Deputy Commissioner of Labour is not the  competent  officer
to make an order of reference to either  the  Industrial  Tribunal   or  the
Industrial Tribunal. The Additional  Commissioner  of  Labour  is  the  only
competent authority who is the delegatee of the State Government as per  the
notification dated 9.8.2003 issued by the Ministry of Labour, Government  of
Maharashtra and therefore, he alone could have passed an order of  reference
under Section 10(1)(d) of the Act. Thus, the order of  refusal  to  make  an
order of reference of the existing industrial dispute  between  the  parties
to the Industrial Tribunal is void ab initio in law  as  the  same  has  not
been  exercised  by  competent  officer  as  the  delegatee  of  the   State
Government. On this ground itself the impugned judgment  and  order  of  the
High Court is justified in quashing the order of refusal to  make  an  order
of reference regarding the industrial dispute to the Industrial Tribunal.

With reference to the above  mentioned  rival  legal  contentions  urged  on
behalf of the parties, we have carefully examined the impugned judgment  and
order, with a view to find out  whether  the  High  Court  is  justified  in
quashing the order of refusal to make an order of  reference  regarding  the
industrial dispute raised by the first respondent-Union  on  behalf  of  the
concerned workmen to  the  Industrial  Tribunal  for  its  adjudication.  We
answer the same in the affirmative in favour of the  first  respondent-Union
for the following reasons:-
     It is an undisputed fact that the concerned workmen are  the  employees
of M/s Wyeth Ltd. who is the respondent no.3 herein  and  the  appellant  in
the connected appeal. The contention urged by the learned senior counsel  on
behalf  of  the  respondent-Union  is  that  the  alleged  transfer  of  the
undertaking of M/s Wyeth Ltd. in favour of the appellant-Company  is  not  a
genuine transfer and it is a sham one, as it is a transfer of the assets  of
the Company only not the transfer of business of M/s Wyeth  Ltd.  Therefore,
the same is not in conformity with the provisions of  Section  25FF  of  the
Act. This aspect of the  matter  requires  adjudication  by  the  Industrial
Tribunal in order to find out the  correctness  of  the  plea,  whether  the
transfer of the undertaking M/s Wyeth Ltd. in favour  of  the  appellant  is
genuine or not and whether the concerned workmen have accepted  the  retiral
benefits  and  other  monetary  claims  voluntarily,  as  pleaded   by   the
appellant. This complicated question of fact and law  could  not  have  been
decided by the alleged delegatee of the State Government in exercise of  its
administrative power, as he is not the competent authority on behalf of  the
State Government to make an order of reference to the  Industrial  Tribunal.
The conclusion arrived at  by  the  High  Court  is  supplemented  with  the
reasons arrived at by this  Court.  Therefore,  quashing  of  the  order  of
refusal to make an order of reference by the High Court is  perfectly  legal
and valid which need not be interfered with by this  Court  in  exercise  of
its jurisdiction.

The other important factual aspect of the  case  is  whether  the  voluntary
retirement of the concerned workmen was forced or  not  is  required  to  be
produced by the parties before the  Industrial  Tribunal  for  its  detailed
examination and scrutiny. The fact that certain documents were sought to  be
summoned at the instance of first respondent-Union during  the  conciliation
proceedings from the appellant-Company by  the  Conciliation  Officer  which
were not produced by it is one more important factor which  is  required  to
be considered by the Industrial Tribunal under Section  10(1)(d)  read  with
the Third Schedule of the Act in exercise of its  original  jurisdiction  to
resolve the disputed questions of fact. Further, the VRS produced on  record
by  the  Management  gives  it  the  discretion  to  arbitrarily   fix   the
compensation varying from Rs.50,000/- to  Rs.7,11,000/-,  which  if  proved,
would be considered as arbitrary and there would be a grave  miscarriage  of
justice to the concerned  workmen.  This  aspect  of  the  matter  has  been
ignored by the Deputy Labour Commissioner, who has  erroneously  refused  to
make an order of reference to the Industrial Tribunal for  its  adjudication
of the existing industrial dispute.

Further, there are serious allegations made  against  the  appellant-Company
by the workmen regarding the alleged coercion,  undue  influence  and  force
used on them for obtaining their signatures on blank papers, which needs  to
be examined very  carefully  by  the  Industrial  Tribunal  after  recording
evidence from both the parties. Prima  facie,  the  absence  of  documentary
evidence produced by the appellant-Company to show that the VRS  was  framed
by it and converting the signatures of the  concerned  workmen  obtained  on
the blank papers amounts to  forced  termination  of  the  services  of  the
concerned workmen which is  a  disputed  question  of  fact  which  requires
adjudication by the competent Industrial Tribunal and therefore, the  demand
regarding the alleged termination of the concerned workmen  is  required  to
be referred to the Industrial Tribunal by  the  State  Government.  The  non
consideration of this aspect of the matter in  the  order  dated  14.08.2006
passed by the Deputy  Labour  Commissioner  highlighting  only  the  factual
aspect pleaded by the appellant-Company unilaterally and  not  referring  to
the  facts  pleaded  on  behalf  of  the  concerned  workmen  by  the  first
respondent-Union is once again totally marred by non application of mind  on
the part of the Deputy Commissioner of Labour, apart from the fact that  the
Deputy Labour Commissioner has no competency to  exercise  his  power  under
the provisions of Section 10(1)(d) of the Act, either to make  reference  or
to refuse to make  reference  to  the  Industrial  Tribunal.  On  the  above
grounds also, the impugned judgment and order  of  the  High  Court  is  not
required to be interfered with by this Court in these appeals. Reliance  has
been placed upon the decision of this Court by the  learned  senior  counsel
on behalf of the first respondent-Union in the case  of  National  Insurance
Co. Ltd. v. Boghara Polyfab Pvt.  Ltd.[13],  wherein  this  Court  has  held
thus:
“26. When we refer to a discharge of contract  by  an  agreement  signed  by
both parties or by execution of a full and final  discharge  voucher/receipt
by one of the parties, we refer to an agreement or discharge  voucher  which
is validly and voluntarily executed. If  the  party  who  has  executed  the
discharge agreement or discharge voucher,  alleges  that  the  execution  of
such discharge agreement or voucher was on account  of  fraud/coercion/undue
influence practiced by the other party and is able to  establish  the  same,
then obviously the discharge of the contract by  such  agreement/voucher  is
rendered void and cannot be acted upon. Consequently, any dispute raised  by
such party would be arbitrable.”


Further, the failure report of  the  conciliation  proceedings  is  not  the
sufficient material evidence to  arrive  at  the  conclusion  by  the  State
Government to decline to exercise its statutory power under  the  provisions
of Section 10(1)(d) read with the  Third  Schedule  of  the  Act  either  to
make/or not to make an order of reference. The refusal to make an  order  of
reference by the State Government’s delegatee amounts  to  determination  of
the existing dispute between the parties by  the  State  Government  in  the
absence of relevant and material evidence on record which ought not to  have
been done by him while exercising his power under Section  10(1)(d)  of  the
Act. In this regard, the High Court has rightly  placed  reliance  upon  the
case of Ram Avtar Sharma  &  Ors.  v.  State  of  Haryana  &  Anr.[14],  the
relevant para of which reads thus:
“11. The appropriate Government being the Central Government  in  this  case
declined to make a reference as per its order  dated  December  9,  1983  in
which it is stated that 'the action of the management  in  imposing  on  the
workmen penalty of removal from service on the basis of an  enquiry  and  in
accordance with the procedure laid down in the Railway Servants  (Discipline
& Appeal) Rules. 1968 is neither malafide nor unjustified.  The  appropriate
Government does not consider it  necessary  to  refer  the  dispute  to  the
Industrial Tribunal for adjudication.' Ex facie it  would  appear  that  the
Government  acted  on  extraneous  and  irrelevant  considerations  and  the
reasons hereinbefore mentioned will mutatis  mutandis  apply  m  respect  of
present order of the Government under  challenge.  Therefore  for  the  same
reasons, a writ of mandamus must be issued.

12. Accordingly all the writ petitions are allowed  and  the  rule  is  made
absolute in each case. Let a  writ  of  mandamus  be  issued  directing  the
appropriate Government in each case namely  the  State  of  Haryana  in  the
first mentioned group of petitions and the Central Government in the  second
petition  to  reconsider  its  decision  and   to   exercise   power   under
Section 10 on relevant and considerations germane to the decision. In  other
words, a clear case of reference under Section 10(1) in each  case  is  made
out.”

Further, the High Court has rightly adverted to various  judgments  of  this
Court including Bombay Union of Jornalists v. State of  Bombay[15]   wherein
it was held thus:
”6. ………it would not be possible to accept  the  plea  that  the  appropriate
Government is precluded from considering even prima facie the merits of  the
dispute when it decides the question as to  whether  its  power  to  make  a
reference should be exercised under Section 10(l)read  with  Section  12(5),
or not. If the claim made is patently frivolous, or is clearly  belated  the
appropriate Government may refuse to make  a  reference.  Likewise,  if  the
impact of the claim on the general relations between the  employer  and  the
employees in the region is likely to be adverse, the appropriate  Government
may take that into account in deciding whether a reference  should  be  made
or not. It must, therefore, be held that and prima facie examination of  the
merits cannot be said to be foreign to the  enquiry  which  the  appropriate
Government is entitled to make in  dealing  with  a  dispute  under  Section
10(1)……”

Therefore, in the present case, the dispute raised by  the  respondent-Union
on behalf of the concerned workmen is neither patently frivolous nor  is  it
a belated claim of the concerned workmen.  The  contention  of  the  learned
senior counsel for the appellant that the workmen are  barred  from  raising
the industrial dispute on the ground of estoppel, is also rejected  by  this
Court in view of the fact that estoppel  is  a  principle  of  equity  which
deals with the effect of contract and not with its cause. It does  not  mean
that a void or voidable contract cannot be  adjudicated  by  the  Industrial
Tribunal/courts merely because  the  concerned  workmen  have  accepted  the
voluntary retirement  as  pleaded  by  them  and  other  benefits  from  the
appellant as per the case of National Insurance Co. Ltd. (supra).

Having  regard  to  the  facts  and  circumstances  of  the  case  and   the
contentions urged on behalf of the learned counsel for the parties, we  have
come to the conclusion that these are the  disputed  questions  of  fact  in
this case, which requires determination on the  basis  of  evidence  by  the
Industrial Tribunal and therefore, a valid reference has to be  made  to  it
by the State Government. The various decisions relied upon  by  the  learned
senior counsel Mr. C.U. Singh on behalf of the appellant referred  to  supra
are misplaced and have no application to the fact situation of  the  present
case.

Further, the High Court has not considered another important aspect  of  the
case, namely, that the Deputy Commissioner of Labour is not  entrusted  with
the power under Section 10(1) (d) of the Act as the delegatee of  the  State
Government as per the new  Notification  dated  09.08.2003,  issued  by  the
Industries, Energy and Labour Department, Mantralaya, Mumbai in exercise  of
its power conferred under Section 39(b) of the  Act  which  is  produced  on
record.  As  per  the  said  notification,  the  State  of  Maharashtra  has
conferred its power upon the Labour Commissioner and the  Additional  Labour
Commissioner to exercise its power under Section 10(1),(2) & (3)  and  other
provisions of the Act. There  is  no  other  notification  produced  by  the
employer either before the High Court or this Court to show that the  Deputy
Labour Commissioner has got power as the delegatee of the  State  Government
to make an order of reference under the provisions of Section 10(1)(d)  read
with the Third Schedule of the Act  to  the  Industrial  Tribunal.  On  this
ground also, the order of the Deputy Labour Commissioner, refusing  to  make
an order of reference regarding the  industrial  dispute  of  the  concerned
workmen is vitiated in law, as the  same  is  void  ab  initio  in  law  and
therefore, quashing  of  the  said  refusal  order  by  the  High  Court  is
perfectly justified.

 The appellant-Company has also  contended  that  the  respondent-Union  has
also raised the legal  question  regarding  the  competency  of  the  Deputy
Labour Commissioner in passing the order of reference  for  the  first  time
before this Court and the  same  was  not  raised  before  the  High  Court,
therefore,  the  same  shall  not  be  permitted  to  be  raised  in   these
proceedings and this Court need not go into this aspect of the matter  which
is wholly untenable in law. This contention raised  by  the  learned  senior
counsel for the appellant is  rejected as the said  contention  is  contrary
to the issues/principles laid down by the Privy Council and  this  Court  in
the following judgments:
    In Connecticut Fire  Insurance  Co.  v  Kavanagh[16],  Lord  Watson  has
observed as under:
“When a question of law is raised for the first time  in  a  court  of  last
resort, upon the construction of a document, or upon facts  either  admitted
or proved beyond controversy, it is not only  competent  but  expedient,  in
the interests of justice, to entertain the plea.”


     The aforementioned view of the Court of Appeal have  been  relied  upon
by this Court in Gurcharan Singh v Kamla Singh[17]. Therefore,  with  regard
to the above mentioned aspect regarding the plea of the  competency  of  the
Deputy Labour Commissioner to pass an order of refusal to make a  reference,
although is being raised before this Court for the first time, is  based  on
admitted facts. Hence, in accordance with the view taken  by  the  Court  of
Appeal in Connecticut Fire Insurance Co. case  (supra)  and  this  Court  in
Gurcharan Singh case (supra), the argument advanced by the first respondent-
Union deserves to be considered by this Court. Similar view  has  also  been
taken by this Court in  the  cases  of  VLS  Finance  Limited  v.  Union  of
India[18] and Greater Mohali Area Development Authority v.  Manju  Jain[19],
wherein it has been held that pure question of law  can  be  raised  at  any
stage of  litigation.  In  National  Textile  Corporation  v.  Naresh  Kumar
Jagad[20], it has been held by this Court that a  new  ground  raising  pure
legal issue for which no inquiry or proof is required, can be raised at  any
stage. Further, in the case of  Port  Trust  v  Hymanshu  International[21],
this Court has held thus:
“2……. The plea of limitation based on this section is one  which  the  court
always looks upon with  disfavour  and  it  is  unfortunate  that  a  public
authority like the Port Trust should, in all morality and justice,  take  up
such a plea to defeat a just claim of the citizen.  It  is  high  time  that
governments and public authorities adopt the practice of  not  relying  upon
technical pleas for the purpose of defeating legitimate claims  of  citizens
and do what is fair and just to the citizens. Of course, if a government  or
a public authority takes up a technical plea, the Court  has  to  decide  it
and if the plea is well-founded, it has to be upheld by the court, but  what
we feel is that such  a  plea  should  not  ordinarily  be  taken  up  by  a
government or a public authority, unless of course the claim  is  not  well-
founded and by reason of delay in filing it, the evidence  for  the  purpose
of resisting such a claim has become unavailable……”


 The conclusion arrived at by the High Court that the order  of  refusal  to
make an order of  reference  of  the  existing  industrial  dispute  to  the
Industrial Tribunal by the Deputy Commissioner of Labour is bad in  law  and
it has rightly issued the writ of mandamus to the State Government  and  the
Deputy Commissioner of Labour for the reason  that  the  employer  has  been
litigating the matter before the High Court for several years and  the  High
Court, based on the pleadings and evidence on record, must  have  felt  that
the  disputed  questions  of  fact  pleaded  by  the  parties  warrant   the
adjudication  of  the  dispute  effectively  by  the  Industrial   Tribunal.
Therefore, we do not find any reason to set  aside  the  order  of  writ  of
mandamus issued by the High Court to the  State  Government  represented  by
the Deputy Labour Commissioner.


 The reliance placed upon  the  various  judgments  of  this  Court  by  the
learned senior counsel for the appellant on merits of the alleged  voluntary
retirement of the concerned workmen need not be examined  in  these  appeals
by this Court, as those judgments have no application to the fact  situation
of the present case and it would be premature to apply the  said  principles
to the fact situation at this stage,  particularly,  having  regard  to  the
legal contentions urged by the learned  senior  counsel  on  behalf  of  the
respondent-Union.

The learned senior counsel on behalf of the  appellant-Company  has  further
contended that the dispute raised by the first  respondent-Union  on  behalf
of the concerned workmen under the provisions of the  Act  and  the  request
made by it to refer the industrial dispute to the  Industrial  Tribunal  for
its adjudication is barred under Section 59 of the  MRTU  &  PULP  Act.  The
aforesaid contention is wholly untenable in law  for  the  reason  that  the
cause of action for the present complaint under the provisions  of  the  Act
is with regard to the illegal action on the part  of  the  appellant-Company
in obtaining the alleged voluntary retirement  letters  from  the  concerned
workmen, whereas, the proceedings under the MRTU & PULP Act are  in  respect
of the alleged transactions between  the  appellant-Company  and  M/s  Wyeth
Ltd. which has resulted in the transfer of the services of the workers  from
M/s. Wyeth Ltd. to the appellant-Company which cause of  action  in  respect
of these proceedings arose on 30.8.2004. Thus, the present dispute  is  with
regard to the so-called “Voluntary  Retirement”  of  the  concerned  workmen
which took place  on  15.4.2005  and  20th/21st  April,  2005,  wherein  the
subject matter is whether such “Voluntary Retirement” was obtained by  undue
influence, coercion, fraud, etc. and whether the  workmen  are  entitled  to
reinstatement with full back wages and  continuity  of  service.  Therefore,
the subject matter of the complaint under the provisions of MRTU & PULP  Act
and the subject matter  of  the  industrial  dispute  raised  by  the  first
respondent-Union under the provisions of the Act are  totally  different  as
they arise out of different cause of action. Hence, the contention urged  in
this regard by the learned  senior  counsel  on  behalf  of  the  appellant-
Company must fail.



Hence, in our considered view the impugned judgment and order passed by  the
High Court is perfectly legal and valid and  the  same  does  not  call  for
interference  by  this  Court  except  with  certain  modification  in   the
operative portion of the order of the High Court,  namely,  with  regard  to
the direction given to  the  State  Government  represented  by  the  Deputy
Labour Commissioner  which  is  not  in  accordance  with  the  notification
referred to supra. The said direction has to  be  given  to  the  Additional
Labour Commissioner (in accordance with the Notification  dated  09.08.2003)
to make an order of reference to the Industrial Tribunal  within  six  weeks
from the date of receipt of the copy of this order as the  matter  has  been
pending at the reference making  stage  itself  for  several  years  at  the
instance of the appellant-Company and the respondent no.3 herein.


We therefore, issue the direction to the  State  Government  represented  by
its delegatee, the Additional Commissioner of Labour, to make  an  order  of
reference to the competent Industrial Tribunal within  six  weeks  from  the
date of receipt of  the  copy  of  this  judgment.  We  further  direct  the
Industrial Tribunal to decide the case within six months from  the  date  of
receipt of such order of reference after affording an  opportunity  to  both
the parties and to pass appropriate award.

The Industrial Tribunal shall not be influenced by the observations made  in
this judgment. The  Industrial  Tribunal  shall  examine  the  case  of  the
parties with reference to the evidence that may be  produced  on  record  by
them and the rival legal contentions that would be urged on  behalf  of  the
parties may be considered at the time of adjudication  of  the  dispute  and
the same has to  be  adjudicated  on  its  own  merit  uninfluenced  by  the
observations made in the judgment.

These appeals are dismissed with costs  of  Rs.  one  lakh  in  each  appeal
towards the cost of these proceedings, for the reason that they have  caused
delay  in  referring  the  dispute  to  the  Industrial  Tribunal  for   its
adjudication. The same shall be deposited  before  the  Industrial  Tribunal
immediately after the order of reference  is  made  to  it  and  before  the
parties are called upon to file their respective claims and the said  amount
shall be paid to the concerned workmen  proportionately  through  the  first
respondent-Union. The order dated 24.9.2007 granting stay  of  the  impugned
order shall stand vacated.



                                                ……………………………………………………………………J.
                        [V.GOPALA GOWDA]



                                                ……………………………………………………………………J.
                        [C. NAGAPPAN]

New Delhi,
April 29, 2015

-----------------------
[1]    (1951)  SCR  548
[2]     (1975) 2 SCC 818
[3]     (1976) 1 SCC 60
[4]     (2003) 2 SCC 721
[5]     (2003) 5 SCC 163
[6]     (2004) 2 SCC 193
[7]     (2004) 4 SCC 484
[8]     (2006) 9 SCC 177
[9]     (2006) 5 SCC 759
[10]    (2003) 11 SCC 572
[11]    (2000) 3 SCC 93
[12]   (2005) 12 SCC 738
[13]   (2009) 1 SCC 267
[14]   (1985) 3 SCC 189
[15]   AIR 1964 SC 1617
[16]   (1892) A.C 473, 480 (PC)
[17]   (1976) 2 SCC 152
[18]    (2013) 6 SCC 278
[19]   (2010) 9 SCC 157
[20]   (2011) 12 SCC 695
[21]   ( 1979) 4 SCC 176

-----------------------
|REPORTABLE     |





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